Affordability, Credit Access Spur Used-Vehicle Sales

Tighter underwriting standards and vehicle affordability are spurring new-car shoppers to buy used, Lawrence Dixon, senior director of valuation services at J.D. Power, told Auto Finance News. “In an environment where new-vehicle demand is plateauing, we believe a big reason for that is affordability,” Dixon said. “New-vehicle affordability is becoming increasingly difficult to attain, consumers […]

• Monica Melton
• November 14, 2018
• Sales & Marketing, Strategy

Alt-Data Helps Lenders Overcome Underwriting Hurdles

LAS VEGAS — Lenders are making alternative data a more integral part of the underwriting process. In the subprime sector, alternative data can paint a clearer picture and better assist lenders in assuming comfortable risk levels. “The more information you can have, the better a decision you can make and potentially price loans the right […]

• Monica Melton
• November 13, 2018
• Auto Finance Summit 2018, Credit Performance, Sales & Marketing, Strategy, Technology

Nicholas Financial Applies for Direct Lending License in Ohio

Nicholas Financial is looking to expand its direct lending footprint into Ohio. Clearwater, Fla.-based Nicholas already offers a direct loan product in three states. “We have not only been able to increase our focus on direct loan production in Florida and North Carolina, but we are now writing direct loans in the state of Georgia […]

• Monica Melton
• November 2, 2018
• Credit Performance, Earnings, Operations, Strategy

Credit Acceptance 3Q Profits Accelerate Despite Downturn in Active Dealer Volume

Net income at Credit Acceptance Corp. shot up 50% year over year in the third quarter, though average volume per active dealer declined — 2.9% — for the first time in 2018, Chief Executive Brett Roberts said in an earnings call yesterday. “This quarter was down a little bit from the trend line, and volume […]

• Nicole Casperson
• October 30, 2018
• Earnings

14% of Subprime Loans at Franchise Dealers Have Price Inflation

An estimated 5% of franchise dealerships up-charge vehicles sold to subprime consumers more than $1,000 on average above the online advertised price, making it more likely that borrowers will default on their loans, Josh Wortman, an analyst with General Forensics, told AFN. Since 2017, Wortman’s data also shows that 26% of independent dealerships inflate prices […]

• Nicole Casperson
• September 20, 2018
• Risk

Captives, Banks Lag in Industry Efforts to Reduce Delinquencies

Delinquency rates are down for the auto finance industry overall, but captives and banks are showing increased rates, Melinda Zabritski, Experian’s senior director of automotive financial solutions, told Auto Finance News. Industry-wide 30-day delinquencies dropped to 2.1% of total loans outstanding in 2Q18 compared with 2.2% a year ago. Meanwhile, 60-day delinquencies fell to 0.64% from […]

• Nicole Casperson
• August 31, 2018
• Capital Markets, Operations

Subprime Lenders Willing to Cut Rates to Maintain Volume, Analyst Says

Rising interest rates pose some challenges to subprime lenders, but ultimately, “If you’re willing to cut price there’s plenty of volume — and volumes are strong right now,” Moshe Orenbuch, managing director at Credit Suisse, told Auto Finance News. He explained that subprime lenders have more wiggle room to cut their return on the loan […]

• William Hoffman
• August 21, 2018
• Credit Performance